Personal thoughts, opinions and comments of an independent consultant, political analyst and historian, who lives in Ireland but is aware of the whole world.

06 October 2008

Another Black Monday

The world's financial markets have been in a deep crisis for weeks, but today they are in panic.

No other word fits the massive turmoil, chaos and running-about like a bunch of headless chicken. There have been heavy falls on stock markets everywhere, with many exchanges hitting record lows and seeing big sell-offs of bank shares.

Analysts are blaming a lack of certainty about US and European rescue initiatives for the financial sector.That is quite correct, but it only exposes the high rollers in the world's banks and financial institutions as the incompetent and greedy fools they are.These brainless wreckers of the economies of many countries, who are unqualified for the overpaid jobs they hold, should be rounded up by the police, interned and charged with collective fraud and high treason.And the governments of their countries should strip them of every personal asset they have accumulated through their criminal machinations which have pushed the world into the biggest crisis for 80 years.

If you think that I am angry about all this, you are quite right. I am very angry.And if you think that my suggestions would be an over-reaction to what happened - well, this might be. But if we let these white-collar criminals get away with billions of looted money while we all have to suffer as a result of their enormous blunder, the same thing will happen again in some years from now and no-one will have learned any lessons.

Poor people who steal some food from a super-market are sent to prison. Perhaps rightly so.But the real criminals who wreck whole nations get - so far - away free and can even keep all their ill-gotten gains.If we let this happen, we deserve every bit of hardship and suffering that is coming to us.

Today will probably enter the history books as another 'Black Monday'. Despite the more than generous (and in my opinion outright foolish) bail-out programmes that many governments - from Ireland over Germany and other EU countries to the USA - have hastily put in place to save the rotten banks, the international money markets seem to know better. Just have a look at today's reports:

DUBLIN:The ISEQ index closed nearly 10% lower, with shares in the four main financial stocks falling sharply. Irish Life & Permanent and Anglo Irish Bank were more than 20% lower.

NEW YORK:The Dow Jones index fell below the key psychological level of 10,000 for the first time since October 2004. It lost as much as 800 points, but recovered later, to close down 'only' 3.3% (340.49 points) at 9,984.89.The high-tech dominated NASDAQ index fell 4.34% (84.43 points) to 1,862.96.The Standard & Poor's 500 index lost 3.62% (39.78 points) and closed at 1,059.45.

LONDON:The FTSE index tumbled nearly 8% to stand at 4589 at the close. Banking stocks were hit particularly hard and a total of over £ 93 billion was wiped off the value of British shares.

FRANKFURT:The DAX index was down 7% to 5387.

PARIS:The CAC index sank 9% to stand at 3712, its heaviest one-day loss since its creation in 1988.

And these are only the most important ones. There was a downturn in share value everywhere, with not one single example of an economy moving against the trend.

Iceland, a small country with a population of only 250,000, avoided narrowly a complete collapse. Only through a state of emergency and nationalisation of their banks, augmented with the introduction of draconian government powers, did they avoid the risk of becoming a failed state overnight.

The list could go on and on... and I am sure that we will hear more of the same soon.

But do we get any real solutions from our political leaders? Not a word. All they do is throwing a lot of good money after plenty of bad, blowing up the balloon ever more, until it will eventually burst with a bang so loud and large that no-one - not governments and not the banks - will have a leg left to stand on.

Throughout the years of the 'Celtic Tiger' not one bank in Ireland encouraged people to save money. Interest rates for deposits were so low that they actively prevented any real savings. (The only positive exception was the SSIA scheme introduced by Charlie McCreevy, but as it was running for only a limited time, it had only a limited effect.)

But the banks did not only prevent people from saving money, they aggressively encouraged them to spend and borrow ever more, often way beyond prudence and people's real means. Especially young people were heavily targeted by the financial industry, given two or three credit cards and offered 100% mortgages for over-priced houses as well as loans for cars well above their income level and social status.

Above that, the same banks loaned billions to rival property developers, driving them into a hyped-up construction boom that was unsustainable from the very start. The government, and in particular the majority party Fianna Fáil, gave all this its blessing and supported the bubble with very generous tax conditions for the super-rich and the greedy wannabees riding the 'Celtic Tiger'.

Sadly the opposition did not offer any resistance or alternatives either. Even in the 2007 general election campaign Fine Gael pretended that the economy was sound and the country was not facing any financial problems. They could and should have known better, as many analysts warned already of the imminent end of our economic boom.

But Fine Gael leader Enda Kenny (left) and the American consultants who organised his campaign thought that they might lose votes if they mentioned a potential return to harder times. Well, seldom in Irish history was such a crucial strategic mistake made by a party leader.Had Kenny attacked the government on the grounds of the already shaky economy and the declining financial reserves, he might well be Taoiseach now, with (the then Labour Party leader) Pat Rabbitte as Tánaiste.

And even if they had failed to form a government, they would now at least stand on the moral and political high ground, from which they could attack the incompetent and failing government. However, as things are, the opposition - with the sole exception of Sinn Fein - is caught in the same net of ignorance and complacency that envelopes the government.

One has to wonder if the Green Party is beginning to regret its decision to join the government in 2007. Usually one can see rats leaving a sinking ship, and not jumping onto one. But what is done is done, and so the once proud standard bearers for political and economical alternatives are no more. They have sold their souls and principles for a short-term taste of power, and now they are locked into the rotten system they started out to reform 25 years ago.

Looking around, there is not much hope for changes. Political and economical lifeboats have been burned on the bonfire of our vanities, and now the Irish nation and most of the world - including children, grandchildren and the yet unborn - have to take on a heavy mortgage for the unstable house of capitalism.

There would be ways out of the crisis, and proper solutions, but those who have the power for now are unable and unwilling to even contemplate real alternatives to the capitalist system. Thus we will have no choice but to prepare ourselves for a long and bleak period of collective suffering, while the rich and super-rich who robbed us of a decent future have a good laugh and continue to live in luxury.

2 comments:

Buy it. Sell it. Make a profit. It doesn't matter what it is. Doesn't matter if we need it or want it.It's All Tuna! is where you can find out about how the "market" treats its customers. Our lives are something for them to buy and sell and on which to make a profit. When the profits begin to fail, they make us "lend" them our futures too.

Kevin Phillips wrote in Bad Money that the Canadian financial community a few years ago wanted the government and news media to declare a credit emergency in order to get a bailout. They failed to get what they wanted. Our Congress was not so smart. Naomi Klein wrote us a history of laissez-faire economics in her book Shock Doctrine and demonstrates how far the powerful financial institutions will go to make a profit. Rampant Capitalism is just as bad as zealous Socialism.

It is unfortunate that we Americans can point to Europe, Iceland and Asia to reassure ourselves that our mortgages and foreclosures are not the only cause of this global crisis. Since misery loves company we are all invited to the pub to drown our sorrows.

Buy it. Sell it. Make a profit. It doesn't matter what it is. Doesn't matter if we need it or want it.It's All Tuna! is where you can find out about how the "market" treats its customers. Our lives are something for them to buy and sell and on which to make a profit. When the profits begin to fail, they make us "lend" them our futures too.

Kevin Phillips wrote in Bad Money that the Canadian financial community a few years ago wanted the government and news media to declare a credit emergency in order to get a bailout. They failed to get what they wanted. Our Congress was not so smart. Naomi Klein wrote us a history of laissez-faire economics in her book Shock Doctrine and demonstrates how far the powerful financial institutions will go to make a profit. Rampant Capitalism is just as bad as zealous Socialism.

It is unfortunate that we Americans can point to Europe, Iceland and Asia to reassure ourselves that our mortgages and foreclosures are not the only cause of this global crisis. Since misery loves company we are all invited to the pub to drown our sorrows.

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A hundred thousand Welcomes, as we say in Irish.

You are indeed most welcome to my humble weblog, to which I post each day a personal column, reflecting my views, thoughts and opinions of the day. Often the entries will be inspired by events and news from Ireland or abroad. Having lived in various countries before I grew solid roots on the Emerald Isle, I take note of many things that happen on the planet.And I have views and opinions.Please be my guest, read and think, and feel free to leave your personal comments as well. They are as welcome as you are here.On the right you also find some additional information, related to Ireland and other matters, for example books I recommend. From time to time I also have opinion polls and appreciate your participation. And if you like what you read, you can subscribe to my weblog (using the box below) and will receive every new entry automatically.And in case you want to find a specific word or subject - on the world-wide web or on one of my two weblogs - then you don't even have to leave the site. Scroll down to the very bottom and you will find a perfect search engine, powered by Google.

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FACTS ABOUT IRELAND

The Emerald Isle

(also known as Ireland) has been inhabited by humans for at least 10,000 years. This image shows the topographical structure of the island, which was until recent times very important and decided in many cases where the people would build their settlements.The oldest surviving monuments in Ireland date from megalithic times between 5000 and 3500 BCE. About 200 BCE the Celts, familiar with the use of iron, conquered the island.

Around 1000 years later Viking raiders from Norway appeared, and in 914 they built the first city in Ireland, calling it "Vadra Fjord" (safe anchorage), which later became Waterford.In 1169 this city was the first to be taken by the Normans, when they invaded and conquered large parts of the island, including the capital Dublin.

In later centuries Ireland became more known for emigrants, as famine, poverty and oppression drove people out into the world. (About 45 million Americans have Irish ancestry.)However, since the unexpected economic boom (known as the "Celtic Tiger"), which we had for about a dozen years, there are now many immigrants on the Emerald Isle, coming from almost everywhere and turning the once quiet and introvert island into a vibrant international community.

Unfortunately the boom turned out to be only a bubble, based on false hopes, speculation and criminal gambling by reckless bankers. So now we are in a deep economic recession, which is made even worse by our current incompetent government.What will happen to Ireland in the future is hard to say, but it all will depend on making the right political, economic, and social decisions.

There is a realistic chance that Ireland could become a major producer of clean energy, and proposals have been presented already to the government and the public. It will now depend on our politicians to make the right decisions. If they do, then we can have a bright and promising future. If not, Ireland is in danger of becoming a poor third-world country.

Ireland's Countryside

is predominantly green. It is said that there are actually forty different shadesofgreen on the island, but few people go around counting.The landscape is rolling, with drumlins, hills and river valleys, and one is never far from the sea in Ireland.Ancient Stones like the one on this photo can be found in many parts of Ireland. They are the remnants of the old religion, which is once again growing on the Emerald Isle.

Ireland's National Flag

was first introduced during the uprising of 1848 in Waterford, Ireland's oldest city, by Thomas Francis Meagher, a native of the city who later rose to prominence as a Union General (and leader of the famous Irish Brigade) during the American Civil War (1861-65).An Bhratach Náisiúnta, as she is called in Irish, is a vertical (revolutionary) tricoleur, inspired by and modeled on the flag of the French Republic.The colours are green, white and orange. They represent the land and the predominantly Catholic nationalist majority (green), the protestant Anglo-Irish minority (orange), and the peace (white) that exists between them.

The flag was used by nationalists in private since 1848 and flown in public again during the Easter Rising of 1916 in Dublin. In 1919 she was adopted as the official flag of the Irish Republic.

Uachtarán na hÉireann

Prof. Mary McAleese is the 8th President of the Republic of Ireland. First elected to the office in 1997 as a representative of the majority government party Fianna Fáil, she is now in her second seven-year term, to which she was elected without opposition in 2004. She is the second female President of the Republic and currently also the longest-serving elected female head of state in the world. Born in Belfast, she encountered the Northern troubles first-hand and her Catholic family was forced out of their house by "loyalist" terrorists. After studying law in Belfast and Dublin, she qualifed as a barrister. In 1975 she was appointed a professor in the legal faculty of Trinity College, Dublin and in 1979 joined RTÉ television as a journalist and presenter. Since 1981 she combined both areas of work, but returned in 1987 to Belfast, as Director of the Institute of Professional Legal Studies at Queen's University, which appointed her Pro-Vice Chancellor in 1994.

An Taoiseach

Brian Cowen, TD is the 12th Prime Minister of the Republic of Ireland and the 7th leader of the majority government party Fianna Fáil. In 1984, aged 24, he was elected to the Dáil in the constituency his father Bernhard, a local publican, had represented before. After 8 years in parliament, Cowen was appointed Minister for Labour in 1992. Since then he served as Minister for Transport, Energy and Communications, Minister for Health and Children, and - from 2000 to 2004 - as the Minister for Foreign Affairs. Since 2005 Brian Cowen was Minister for Finance, and since 2007 also Tanaiste (Deputy Prime Minister). When Taoiseach Bertie Ahern declared his resignation on April 2nd, 2008, Cowen was elected unopposed as the new leader of Fianna Fáil on April 9th. On May 7th, 2008 Dáil Eireann elected him Taoiseach. He leads a coalition government inherited from Bertie Ahern and supported by the Green Party and four independent TDs. The now 48-year-old, sometimes referred to as 'Biffo', is married and father of two daughters. A keen Gaelic football fan, he also continues to be president of Clara GAA club.

The Parliament

of Ireland is known as the Houses of the Oireachtas. The House of Deputies (currently 166) is called Dáil Éireann, while 60 Senators form Seanad Éireann, the Senate. Both meet at Leinster House on Dublin's Kildare Street (above). The former city residence of the Duke of Leinster was sold in 1815 to the Royal Dublin Society (RDS) which added two new wings, to accomodate the National Library and the National Museum. After the formation of the Irish Free State in 1922 the central part was chosen as the provisional parliament chamber (until some proper building would be found). Despite plans to turn the Royal Hospital, Kilmainham, into the seat of the Oireachtas, it never happened. So Leinster House is still at the heart of Irish politics. And when Irish architect James Hoban designed the White House in Washington, D.C., he modeled it on Leinster House.

A few words about me

Having been born into an old European family (with 75% of the genes Celtic) I learned early that history and traditions are very important. After a quite turbulent childhood and youth, spent in different countries on three continents, I joined the Navy, served for many years in ships, other commands, and became a historian.
After leaving the Navy I worked in a museum and national monument, taught in school and college, edited a magazine and worked as journalist and broadcaster. Now I earn my crust as an independent consultant and analyst. In my scarce spare time I am involved in various social activities and charity work, write and read a lot, and sometimes even find time for painting.
My house is old and small, and I share it with a cat. Living a simple Spartan life, I eat vegetarian food and do not enjoy alcohol and most entertainments.
Life is too short to be wasted on fripperies. Every day is needed to do one's share - no matter how small it might be - to save the planet and its living creatures.

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The HSE, as seen by "Green Ink"

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